where ingenuity creates impact 401(k) savings plan ... · 12/31/2014 · - dollar cost averaging...
TRANSCRIPT
Where Ingenuity Creates Impact
401(k) Savings Plan
Employee Meeting2014
Jenkon / JIA
presented by
Ron KirkpatrickPresidentLBG [email protected]
© 2011. Retirement Plan Advisory Group. All rights reserved.NFP Securities, Inc. and LBG Advisors LLC do not offer tax or legal services. Please contact the appropriate professional regarding your individual circumstances. Securities and investment advisory services are offered
through NFP Securities, Inc., member FINRA/SIPC. NFP Securities, Inc. is not affiliated with LBG Advisors, LLC or with Liberty Benefits Group.
Where Ingenuity Creates Impact 1
Today’s Discussion
� Introduction
� Why Save in a 401(k)
� Specific Provisions of Your Plan
� Strategies to Consider and What to Avoid
� Your Fund Menu
� Conclusion
Where Ingenuity Creates Impact 2
Background
� LBG Advisors
- Employee Benefits
- Retirement Plans
- Member Firm Of National Financial Partners
� NFP
- $1.2 billion a year in revenue
- Thousands of corporate benefits and retirement plan clients
- Provides great back office support, technology tools, and helps keep your plan in compliance
Where Ingenuity Creates Impact 3
� Do you plan to retire someday?
- Your Retirement Plan is a long-term investment
� Despite market volatility, 401(k) advantages remain:
- Tax-deferred compounding interest
- Dollar cost averaging (Automatic payroll contributions)
- Institutional Share Classes (Minimums Waived)
- Plan also includes ROTH that allows taxes to be paid now (effective January 2015)
- Save up to $18,000 ($12,500 more than IRA) –
- Catch-up of $6,000 (if age 50 or older) for total annual amount of $24,000
Why Invest in 401(k)?
Where Ingenuity Creates Impact 4
Shifting a portion of money to your savings can mean more money for your retirement!
� How much do you spend each week or month?
- Fast food/restaurants
- Coffee/soda/other beverages
- Snacks (e.g., vending machine)
- Alcohol
- Pizza delivery
- Magazines
- Movies
Any Amount Adds Up!
Where Ingenuity Creates Impact 5
� 46% of workers are not too or not at all confident they will have enough money to retire comfortably
� Only 54% of workers have completed a retirement needs calculation
� 47% of people expect to keep working in retirement just to “make ends meet”
� Median household headed by a person aged 60 to 62 with a 401(k) has less than one-quarter of what is needed to maintain its standard of living in retirement
Sources:
(1, 2) Employee Benefit Research and Mathew Greenwald & Associates, Inc. 2010 Retirement Confidence Survey
(3) Retirement Insights: 2010 Guide to Retirement
(4) Wall Street Journal, 2.19.11
Americans Are Not Saving Enough!
Where Ingenuity Creates Impact
Why Take part in a Retirement Plan
Where Ingenuity Creates Impact
Why Take part in a Retirement Plan
Where Ingenuity Creates Impact 8
Feature Provision
Eligibility:
• Employees are required to be age 21, with 3 months of continuous service for Salary Deferral Contributions.
• No minimum number of hours required. • Plan entry is the first day of the month following
satisfaction of eligibility requirements.
Entry:
• First of each quarter after meeting eligibility (1/1, 4/1, 7/1, 10/1)
Savings Limits:
• Participants may defer 1-15% of total annual compensation limited to an IRS maximum of $18,000 for the 2015 calendar year.
• If you are 50 or older, you may defer an extra $6,000 for a total of $24,000.
Savings Changes:• You can change the amount of your payroll deduction
each payroll period, and/or stop making contributions to the Plan at any time.
Jenkon 401(k) Plan Highlights
Where Ingenuity Creates Impact 9
Feature Provision
Vesting:
• Employee deferrals are always 100% vested. • Company Match is 100% vested immediately• Discretionary Profit Share is 100% vested immediately• No Current Match as of 12/31/2014
Loans:
• Participants in the plan may borrow up to 50% of their account balance to a maximum of $50,000.
• Minimum loan amount is $1,000. You may have a maximum of 3 outstanding loan at a time.
• The maximum repayment term for most loans is 5 years, except when borrowing for the purchase of a primary residence where the maximum repayment period would be 15 years or retirement age, whichever comes first.
• Loan interest rate is prime + 0.00% (3.25% as of 12/31/14)• A $150 fee applies to all loans and is paid by the participant.
Jenkon 401(k) Plan Highlights
Customer Service /
Plan Questions
• Ascensus 866.809.8146 www.MyAccount.Ascensus.com/rplink
• LBG Advisors 877.485.2120 • [email protected] or [email protected]
Where Ingenuity Creates Impact
If no longer working at the
company
When Can I Receive Money?
� Age 59½
� Retirement: Age 65
� Termination of Employment After Age 55
� Death
� Permanent Disability
� Distribution Options
- Lump sum
- Roll into new employers plan
- Roll into a rollover IRA
- Leave it with the plan
� Age 59½
� Loans
� Financial Hardship
While employed at the
company
Distribution Options
10
Where Ingenuity Creates Impact 11
Chart is for illustration purpose only and does not predict or guarantee the performance of any security or investment.
Past performance is no guarantee of future results.
The Emotional Cycle of Investing
Hopeful
Excited
Ecstatic
Dejected
Hopeful
Excited
RECOVERY
BOOM
RECESSION
“This is easy”
I knew it. I should never
have invested in that
option
“No problem,
this is short term”
“I’ll wait and see”
RECOVERYSLOWDOWN
Frightened
Anxious
Investing can trigger all sorts of emotions. When returns are rising, you may feel confident, secure, happy.
But just as markets move in cycles, so do emotions. When returns fall, investors’ emotions often do too.
Where Ingenuity Creates Impact 12
Market Comebacks
Where Ingenuity Creates Impact
Stay the Course
Investors who sell at the wrong time often miss significant portions of future recoveries.
Source: Ned Davis Research, Inc.
13
Where Ingenuity Creates Impact
Source: Dalbar, Inc. Quantitative Analysis of Investor Behavior, 2010
0%
2%
4%
6%
8%
10%
12%
14%
Average Annual Return, 1990-2009
Investor Challenges
8.21%
S&P Return
3.17%Average Stock Fund
Investor
2.74%Inflation
14
Where Ingenuity Creates Impact
The performance data herein represents past performance. Past performance does not guarantee future returns. Current performance may be lower or higher than the performance data quoted.
Asset Class Kaleidoscope
15
Where Ingenuity Creates Impact
Investment Choices
Investment
Types
Stocks
Bonds
Cash
Combination
Mutual Fund
Professional
Fund Managers
16
What is a Mutual Fund?
Where Ingenuity Creates Impact 17
Boom
Recession
Slowdown
Recovery
Value Style tends to be in favor
Growth Style tends to be in favor
Investments in smaller company and micro-cap stocks generally carry a higher
level of volatility and risk over the short term.
What is Growth?• High PE ratios• Reinvestment of earnings• Not pay dividends
What is Value?• Consistent dividends• Bought at a discount or undervalued
• Slower growth, low PEs
Diversification Assistance – Growth & Value
Where Ingenuity Creates Impact
What Strategy is Right for You?
� When choosing an investment strategy, consider these things
- Your Current Age
- Your Time to Retirement
- Your Risk Tolerance
- How much do you want to be involved in the research, fine tuning, rebalancing, etc., of the Mutual Funds offered in your plan?
18
Where Ingenuity Creates Impact
U.S. DOMESTIC STOCK (9)
Value Blend Growth
Vanguard Equity Index ADM
Vanguard Total Stock Market Index Signal
Vanguard Growth Index Signal
Large
Victory Established Value Columbia Mid Cap Index R5
PrimeCap Odyssey Mid
Vanguard Sm Cap Value Index Inv.
Vanguard Sm Cap Index Signal
Vanguard Small Cap Growth Index Inv
Small
Fund Menu
19
Where Ingenuity Creates Impact
INTERNATIONAL (3) Specialty / Other (2)
Oppenheimer Intl. Diversified (Lg Cap Blend)
American Funds New World R6 (Emerging)
Am. Funds New Perspective R6 (Global)
T. Rowe Price Health Sciences
John Hancock Alt. Asset Allocation R6
Fixed Income / Bonds (7) ASSET ALLOCATION / Target Dates (14)
Standard Stable Value Fund
Pimco Real Return Instl (US Gov’t TIPS)
IVY Limited Term Bond I (Short Term Bond)
Federated Instl High Yield Bond Instl.
Pimco Global Bond Unhedged (Global Fixed)
Vanguard LT Inv. Grade ADM (Specialty)
Vanguard Int-Term Bond Index Signal (Core)
Manning & Napier Pro-Blend (Conservative)
Vanguard Wellesley Income (Mod-Conservative)
American Funds Inc. Fund of Am. R6 (Moderate)
T. Rowe Price Personal Strat Growth (Aggressive)
JP Morgan Smart Retirement Target Date Funds :
JPM Income Institutional (Mod-Conservative)
2015 (Moderate)
2020,2025 (Growth)
2030,2035,2040,2045,2050,2055 (Aggressive)
Fund Menu
20
Questions?
• For any questions regarding your account, including:
– Login
– Enrollment
– Deferral Amounts
– Allocating your Deferrals
– Changing your Investment Allocations
– Loans or Distributions
– Designating or Changing your Beneficiary
Ascensus: (866) 809-8146 or www.MyAccount.Ascensus.com/rplink
LBG Advisors (877) 485-2120 or [email protected]
877-485-2120
Where Ingenuity Creates Impact 22
Conclusion
� Take advantage of the resources available to you through your Company
� Do the appropriate planning today to help you maintain your goals
� Avoid common mistakes of many investors and remain disciplined to reach your goals
Any questions?